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Novelty Proves a Hit for Taco Bell in India

MUMBAI—Taco Bell is off to a promising start in India, with thousands of customers visiting the American fast-food chain's first Indian outlet daily, even though most have never tasted a taco.

Encouraged by strong growth at its KFC and Pizza Hut chains in India,
Yum Brands Inc.
YUM 0.43%
opened its first Taco Bell in Bangalore on March 16. The store in a mall in India's technology capital has attracted an average of 2,000 to 2,500 customers each day since then.

Extra staff at India's first Taco Bell, in Bangalore, help explain the menu choices to customers.
Yum Brands

India—with an increasingly affluent populace that isn't afraid to try new things—is the next frontier for international fast-food chains, Graham Allan, president of Yum's international division, said in an interview.

"What we are seeing in India is similar to what we saw in China a decade ago," he said. "You have a young population with improving standards of living and an enthusiasm to embrace Western brands."

The group hopes to more than quadruple the total number of Pizza Hut, KFC and Taco Bell stores over the next five years to 1,000. Taco Bell will probably grow to between 50 and 100 branches during that time, Mr. Allan said.

To attract the Indian customer, Taco Bell's menu starts at 18 rupees, or about 40 cents. It is hoping that price is the sweet spot: just below what is on the McDonald's menu and just above street-food prices in the cities.

Taco Bell had to take all the beef out of its regular menu, using chicken instead, and it created many vegetarian options for Indian consumers. Its "Crunchy Taco—Potato" and "Paneer [cheese] and Potato Burritos" are attempts to give Indian consumers a Mexican fast-food experience without the meat.

Yum Brands hired extra employees to explain the menu to Mexican-food novices and placed what it calls a "tacopedia" on the wall so customers will know what they are getting and how to pronounce it.

"These are totally new forms of food [in India], and people will not always get it," said said Niren Chaudhary, managing director of Yum's India business. "Quesadilla is going to be a tongue twister for some."

Yum brands and others in the restaurant industry have increased their attention on international markets in the past 10 years as the U.S. has become saturated with fast-food chains.

Yum's India push will put it in a race for the appetites of consumers in one of the world's most populous countries. It operates more than 70 KFCs in India, compared with
McDonald's Corp.'s
MCD -0.60%
more than 170 outlets. It has about 160 Pizza Huts, while
Domino's Pizza Inc.
DPZ 1.02%
has approximately 275 stores.

In another fast-food first for India, Taco Bell is introducing bottomless beverages. However Mr. Chaudhary said their bottomless Pepsi promotion hasn't been attracting as many customers back for refills as he had expected. He thinks it could be because the stores are too crowded.